The dual benefit of VW group’s improving sales and the investors switching to the export-focused sector has boosted the stock price by nearly 10% in the past one month.
Analysts have upgraded the volume growth estimates to 12% and 14% for FY16 and FY17, respectively, from 8% and 7% before the new pollution code came into effect.
In the absence of clarity on who will bear the burden and the duration of the discount scheme, the stock valuations are expected to come under pressure.
The government has completed one round of stake sale in Engineers India (EIL) in the current fiscal, reducing its holding in the company to 59.4% from 69.4%.
The thrust continued with seven new launches in the first two quarters of the current fiscal. It plans to introduce two more products in the second half.
The forecasts show the current stock price reflects the adverse scenario of the past. It means improving demand in the US is yet to be factored in by investors.
It has reported maximum earnings upgrades in the past four weeks -thanks to favourable prices of crude oil and its derivatives.
Unlike many automakers supporting dealers due to cash crunch, Royal Enfield has not of fered any incentives or changed credit terms for dealers.
The projected earnings per share (EPS) of GAIL, Reliance Industries and Indian Oil may be trimmed by 3-6% for FY17, according to analyst estimates.
On the domestic front, Prima is planning to expand its reach in the northern and eastern parts of India by adding more distributors and retailers.
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